More Price Increase Throughout the Ink8200;Industry

More Price Increase Throughout the Ink Industry

Due to further cost increases in key ingredients necessary for printing inks, ink manufacturers have announced numerous price increases of their own during the past two months. These include the following:

• Central Ink Corporation announced price increases of 10% to 12% on all product lines. Due to continuous price increases from all vendors (in some cases up to 50% in just the past three months), Central Ink must pass some of these on.

• Sun Chemical Europe announced that a 5% price increase was implemented for its sheetfed products effective March 1, 2011. Critical shortages for raw materials such as acrylic acid and gum rosin are affecting the entire print industry. These shortages together with unprecedented raw material cost increases have necessitated this price change. The cost of certain key raw materials has increased by more than 200% from the start of 2009 with further increases expected. Vegetable oils are a major cost driver for all sheetfed inks and the supply and cost of linseed, rapeseed and soybean oil are very complex and volatile. Prices are driven by several factors such as potential harvests, value of the dollar, crude oil prices and bio-diesel production. These factors currently indicate that vegetable oil prices will remain high compared to 2010.

• Faced with continued increases in the costs of raw materials and volatility in the global supply chain, Sun Chemical will raise prices on April 1, 2011 in North America by:

• 4 percent for SunLit Diamond, SunLit Intense and SunLit Exact sheetfed process color inks,
• 8 percent for all other sheetfed process color inks,
• 7 percent for all energy curable (EC) narrow web, tag, and label printing inks,
• 7 percent for all EC packaging printing inks, and
• 7 percent for all EC commercial printing inks.

Due to the global supply challenges associated with graphic arts raw materials, higher demand from developing regions, consolidation and capacity curtailment taken by the chemical industry, and the significant decline in refinery margins over the past two years, the ink industry continues to face significant increases in raw materials costs and supply instability. Further consolidation in the supply base is expected in 2011 along with continued pressure for suppliers to alternatively sell key raw materials into other markets.

The combination of these factors has led to elevated costs in almost every raw material category critical to the production of inks.

• Due to the continued raw material cost pressure, Flint Group has to further increase prices of all packaging inks in Europe effective April 1, 2011.

“The price increases for our customers resulting from the recent issues in the raw material markets will be on average 8 percent. In some segments our cost increases will however necessitate price rises of up to 30 percent,” said Doug Aldred, vice president sales packaging and narrow web EMEA. “Violets, whites, greens and some specific reds are our major concern, and we will inform our customers individually about the overall impact of the price increases and surcharges on their specific product portfolio.”

• Global shortages of key raw materials, including carbazole, have caused the cost of violet pigment V23 to soar in recent months. The short supply is expected to continue in 2011, and as a result, Flint Group was forced to increase the price of all sheetfed spot colors containing the pigment by €2.10/kg.
“Carbazole along with many other raw materials has increased dramatically recently, and the purchase price of Violet 23 has gone up by more than 100% as a result,” explained Nick Brannan, vice president of product management, Print Media Europe.

• In spite of continued efforts to minimize the effects of supply chain challenges and continuing raw material price increases in the ink industry, Siegwerk USA and Canada’s wide web packaging ink division is forced to announce price increases for ink products containing Violet 23 or titanium dioxide effective April 1, 2011. Ink products containing Violet 23 pigment will experience price increases of up to 20%, while those products containing titanium dioxide will experience price increases on a customer-specific basis.

These price increases come in response to continuing raw material price increases throughout the ink industry. Siegwerk has experienced drastic spikes in pricing of Violet 23 pigment ranging from 60-90% from beginning fourth quarter 2010 through first quarter 2011. These increases in the market are due to further consolidations within the raw material supplier sector, as well as increased demand in two key raw materials used in the production of Violet 23 pigment.

Titanium dioxide has also experienced spikes in pricing over the same period in time. Raw material price increases have occurred ranging from 10-20% on titanium dioxide pigments due to a rationalization in supply coupled with increasing demand. With global capacity reduced by as much as 10% over the past three years, titanium dioxide production is in extremely tight supply.